| Thu 16 Oct 2008, 7:05 | | PPC - Pretoria Portland Cement Company - Posting Of Scheme Document To PPC |
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PPC
PPC
PPC - Pretoria Portland Cement Company - Posting Of Scheme Document To PPC
Shareholders, Salient Dates, Effect Of Share Repurchases On The Proposed
Broad-Based Black Ownership Initiative And Revised Pro Forma Financial Effects
Pretoria Portland Cement Company Limited
(Incorporated in the Republic of South Africa)
(Company registration number: 1892/000667/06)
JSE share code: PPC
JSE ISIN: ZAE000096475
ZSE share code: PPC
ZSE ISIN: ZWE000096475
("PPC" or "the company")
POSTING OF SCHEME DOCUMENT TO PPC SHAREHOLDERS, SALIENT DATES, EFFECT OF SHARE
REPURCHASES ON THE PROPOSED BROAD-BASED BLACK OWNERSHIP INITIATIVE AND REVISED
PRO FORMA FINANCIAL EFFECTS
1. Introduction
Further to the announcement dated Thursday, 28 August 2008, PPC shareholders are
advised that the company has posted a scheme document to PPC shareholders
setting out details of the proposed broad-based black ownership initiative ("the
transaction").
The scheme document is available in electronic form on the company`s website at:
http://www.ppc.co.za
For purposes of this announcement, PPC shareholders are referred to the
definitions set out in the announcement dated Thursday, 28 August 2008.
2. Salient dates
The scheme document incorporates the notices convening the general meeting and
the scheme meeting, details of which are set out below.
2.1 General meeting
A general meeting of PPC shareholders will be held at 09:00 on Tuesday, 11
November 2008 at the offices of PPC`s legal adviser, Bowman Gilfillan Inc.,
Auditorium, 165 West Street, Sandton.
2.2 Scheme meeting
In terms of an order of Court granted on Tuesday, 14 October 2008, the High
Court of South Africa (Witwatersrand Local Division) granted an order to convene
a scheme meeting, to be held at 09:30, or ten minutes after the conclusion or
adjournment of the general meeting, whichever is the later, on Tuesday, 11
November 2008 at the offices of PPC`s legal adviser, Bowman Gilfillan Inc.,
Auditorium, 165 West Street, Sandton.
The salient dates and times in respect of the transaction are set out below:
(note 1) 2008
Last day to trade in PPC ordinary shares Thursday, 30 October
on the JSE Limited ("JSE") and Zimbabwe
Stock Exchange ("ZSE") in order to be
recorded in the register of members of
PPC to vote at the scheme meeting on
(note 2)
Scheme meeting record date on Thursday, 6 November
Last day for receipt of proxies in Friday, 7 November
respect of the general meeting by 09:00
on (note 3)
Last day for receipt of proxies in Friday, 7 November
respect of the scheme meeting by 09:30 on
(notes 4 and 5)
General meeting to be held at 09:00 on Tuesday, 11 November
Scheme meeting to be held at 09:30 or ten Tuesday, 11 November
minutes after the conclusion or
adjournment of the general meeting,
whichever is the later, on
Results of general meeting and scheme Tuesday, 11 November
meeting released on SENS on or about
Results of general meeting and scheme Wednesday, 12 November
meeting published in the press on or
about
Court hearing to sanction the scheme at Tuesday, 25 November
10:00 or as soon thereafter as Counsel
may be heard on
IF THE SCHEME IS SANCTIONED AND
IMPLEMENTED:
Announcement on SENS regarding the Tuesday, 25 November
sanctioning of the scheme on or about
Announcement in the press regarding the Wednesday, 26 November
sanctioning of the scheme on or about
Expected last day to trade in PPC Friday, 5 December
ordinary shares on the JSE and ZSE in
order for PPC shareholders to be eligible
to receive the scheme consideration on
Expected first day to trade in PPC Monday, 8 December
ordinary shares on the JSE and ZSE ex-
entitlement to the scheme consideration
under the new ISIN ZAE000125886 in South
Africa and ZWE000125886 in Zimbabwe on
Expected consideration record date at Friday, 12 December
17:00 on
Expected operative date at the Monday, 15 December
commencement of trading on the JSE and
ZSE on
The scheme consideration is expected to Monday, 15 December
be transferred or posted (as the case may
be), and new share certificates expected
to be posted to scheme participants whose
documents of title are received by the
transfer secretaries before 12:00 on
Friday, 12 December 2008, on or about
Or
failing receipt of documents of title
before 12:00 on Friday, 12 December 2008,
within five business days of receipt
thereof by the transfer secretaries.
The scheme consideration is expected to Monday, 15 December
be credited to the dematerialised scheme
participants` accounts held at their CSDP
or broker and share balances updated on
Notes:
1. The abovementioned times and dates are South African times and
dates, and are subject to change. Any such change will be
published on SENS and in the press in South Africa and
Zimbabwe.
2. PPC shareholders are advised that as trading in shares on the
JSE is settled within the Strate environment five business
days following the trade, PPC shareholders acquiring
dematerialised PPC ordinary shares after Thursday, 30 October
2008 will not be eligible to vote at the scheme meeting.
3. If the date of the general meeting is adjourned or postponed,
forms of proxy must be received by no later than 48 hours
prior to the time of the adjourned or postponed general
meeting, provided that for the purposes of calculating the
latest time by which forms of proxy must be received,
Saturdays, Sundays and public holidays will be excluded.
4. If a form of proxy for the scheme meeting is not received by
the time and date shown above, it may be handed to the
chairperson of the scheme meeting by no later than ten minutes
before the scheme meeting is due to commence.
5. If the date of the scheme meeting is adjourned or postponed,
forms of proxy must be received by no later than 48 hours
prior to the time of the adjourned or postponed scheme
meeting, provided that for the purposes of calculating the
latest time by which forms of proxy must be received,
Saturdays, Sundays and public holidays will be excluded.
6. PPC shareholders may not dematerialise or rematerialise their
PPC ordinary shares between Friday, 5 December 2008 and
Friday, 12 December 2008, both days inclusive.
3. Effect of share repurchases on the transaction
The company`s empowerment is measured based on PPC ordinary shares in issue net
of treasury shares. Accordingly, PPC shareholders are advised that the total
size of the transaction has increased in percentage terms from 15.15% to 15.29%
of PPC`s issued share capital (post the implementation of the transaction and
net of treasury shares), as a result of additional share repurchases by PPC
Cement (Proprietary) Limited ("PPC Cement"), a subsidiary of PPC.
At the time of the announcement of the transaction on Thursday, 28 August 2008,
PPC Cement held 14.9 million PPC ordinary shares. On Tuesday, 16 September 2008,
PPC announced that PPC Cement had acquired an additional 2.2 million PPC
ordinary shares and would continue acquiring PPC ordinary shares to reduce the
dilutionary effect of the transaction.
To date, PPC Cement has acquired a total of 20.1 million PPC ordinary shares and
as a result, the total size of the transaction in percentage terms has increased
to 15.29%. PPC shareholders are advised that the total number of PPC ordinary
shares to be issued as part of the transaction, as well as the total number of
PPC ordinary shares to be acquired as part of the scheme of arrangement, have
not been amended.
A breakdown of the effect of the share repurchases on the transaction is set out
in the table below.
As at 28 As at 1
August 2008 October 2008
PPC ordinary 537 612 390 537 612 390
shares in
issue
Treasury 14 900 000 20 140 401
shares
PPC ordinary 522 712 390 517 471 989
shares in
issue net of
treasury
shares
PPC ordinary 48 557 982 48 557 982
shares issued
as part of the
transaction
PPC ordinary 571 270 372 566 029 971
shares in
issue post the
transaction
net of
treasury
shares
PPC ordinary Percentage as Percentage as
shares to be at 28 August at 1 October
held post the 2008 2008
transaction
Indirect
trusts:
The PPC 11 425 407 2.00% 2.02%
Construction
Industry
Associations
Trust Funding
SPV
The PPC 5 712 704 1.00% 1.01%
Education
Trust Funding
SPV
The PPC 4 015 621 0.70% 0.71%
Community
Trust Funding
SPV
The PPC Team 2 856 352 0.50% 0.50%
Benefit Trust
Funding SPV
Direct trusts:
The PPC Black 10 470 419 1.83% 1.85%
Managers Trust
The Current 3 224 658 0.57% 0.57%
PPC Team Trust
and The Future
PPC Team Trust
The PPC Black 287 361 0.05% 0.05%
Independent
Non-executive
Directors
Trust
CSGs and SBPs:
CSG Funding 8 569 056 1.50% 1.51%
SPV
SBP Funding 39 988 926 7.00% 7.06%
SPV
Total 86 550 504 15.15% 15.29%
4. Revised pro forma financial effects
PPC shareholders are referred to the announcement dated Thursday, 28 August 2008
regarding the transaction and are hereby advised of revised pro forma financial
effects excluding the impact of the September 2008 repurchase of PPC ordinary
shares.
The pro forma financial effects set out below have been prepared to assist PPC
shareholders to assess the impact of the broad-based black ownership initiative
on the earnings per PPC ordinary share ("EPS"), diluted EPS, headline EPS
("HEPS"), diluted HEPS, net asset value ("NAV") per PPC ordinary share and
tangible NAV ("TNAV") per PPC ordinary share. The material assumptions are set
out in the notes following the table. These pro forma financial effects have
been disclosed in terms of the Listings Requirements of the JSE and do not
constitute a representation of the future financial position of PPC on
implementation of the transaction. The pro forma financial effects are the
responsibility of the PPC board of directors and are provided for illustrative
purposes only.
Pro forma financial effects
For the 12 months ended 30 September 2007:
Before the After the Percentage
implementation implementatio change
of the n of the
transaction transaction
(cents) (cents) (%)
EPS 266 138 (48)
Diluted EPS 266 132 (50)
HEPS 263 136 (48)
Diluted HEPS 263 129 (51)
NAV per share 437 234 (46)
TNAV per 433 230 (47)
share
For the six months ended 31 March 2008:
Before the After the Percentage
implementation implementatio change
of the n of the
transaction transaction
(cents) (cents) (%)
EPS 126 2 (98)
HEPS 126 2 (98)
NAV per share 242 24 (90)
TNAV per 239 20 (92)
share
Notes:
1. The EPS, diluted EPS, HEPS, diluted HEPS, NAV per PPC ordinary
share and TNAV per PPC ordinary share "Before the
implementation of the transaction" are based on the annual
results for the year ended 30 September 2007 and interim
results for the six months ended 31 March 2008.
2. The equity instruments issued to the CSG Funding SPV and the
SBP Funding SPV are treated as a separate class of equity for
accounting purposes as PPC has the right to acquire all of the
initial subscription shares at their par value. Consequently,
the earnings, EPS, diluted EPS, HEPS and diluted HEPS have
been adjusted accordingly.
3. The PPC Black Managers Trust, The Current PPC Team Trust, The
Future PPC Team Trust, The PPC Black Independent Non-executive
Directors Trust and the Trust Funding SPVs are consolidated
for accounting purposes.
4. The EPS and HEPS "After the implementation of the transaction"
are based on the assumption that the transaction was
implemented on 1 October 2006 and 1 October 2007 respectively,
and include the following:
4.1 An IFRS2 charge of R474.0 million and R467.8 million for
the 12 months ended 30 September 2007 and the six months
ended 31 March 2008, respectively, based on the closing
PPC share price on 21 August 2008 of R32.00 and the 30
trading day VWAP up to the close of business on that date
of R31.3197556755536.
4.2 The finance cost applicable to the implementation of the
transaction for the respective periods above being based
on the relevant prevailing market rates.
4.3 Transaction costs associated with the implementation of
the transaction and recognised in profit or loss amounting
to R25.2 million.
4.4 For accounting purposes, the equity instruments issued to
the CSG Funding SPV and the SBP Funding SPV are treated in
a manner similar to that of an option. Consequently, these
equity instruments are being treated as potential PPC
ordinary shares for the purposes of calculating diluted
EPS and diluted HEPS.
4.5 Similarly, to the extent that share-based payment grants
have been made in terms of the Trust Funding SPVs and
trustees of the Direct Trusts and the Trust Funding SPVs
have settled their funding obligations, the transaction
will ultimately result in PPC ordinary shares vesting with
the Trust Funding SPVs and beneficiaries respectively.
Consequently, these share-based payment grants are
potential PPC ordinary shares and are being treated in a
manner similar to that of an option for the purposes of
calculating diluted EPS and diluted HEPS.
5. The EPS and HEPS "After the implementation of the transaction"
are based on 499 619 868 weighted average PPC ordinary shares
in issue for the 30 September 2007 pro forma financial effects
(537 612 390 weighted average PPC ordinary shares in issue
less 37 992 522 PPC ordinary shares treated as treasury shares
on consolidation).
6. The EPS and HEPS "After the implementation of the transaction"
are based on 497 853 313 weighted average PPC ordinary shares
in issue for the 31 March 2008 pro forma financial effects
(535 845 835 weighted average PPC ordinary shares in issue
less 37 992 522 PPC ordinary shares treated as treasury shares
on consolidation).
7. The diluted EPS and HEPS "After the implementation of the
transaction" are based on 523 735 777 weighted average PPC
ordinary shares in issue for the 30 September 2007 pro forma
financial effects (499 619 868 weighted average PPC ordinary
shares in issue plus 24 115 909 potential PPC ordinary
shares).
8. The NAV per PPC ordinary share and TNAV per PPC ordinary share
"After the implementation of the transaction" are based on the
assumption that the transaction was implemented on 30
September 2007 and 31 March 2008, respectively.
9. The NAV per PPC ordinary share and TNAV per PPC ordinary share
"After the implementation of the transaction" are based on 499
619 868 PPC ordinary shares in issue as at 30 September 2007
(537 612 390 PPC ordinary shares in issue less 37 992 522 PPC
ordinary shares treated as treasury shares on consolidation).
10.The NAV per PPC ordinary share and TNAV per PPC ordinary share
"After the implementation of the transaction" are based on 497
853 313 PPC ordinary shares in issue as at 31 March 2008 (535
845 835 PPC ordinary shares in issue less 37 992 522 PPC
ordinary shares treated as treasury shares on consolidation).
Johannesburg
16 October 2008
Investment Bank, debt adviser and transaction sponsor
Standard Bank
Independent sponsor
Merrill Lynch South Africa (Proprietary) Limited
Reporting accountants and auditors
Deloitte & Touche
Legal adviser
Bowman Gilfillan Inc.
Date: 16/10/2008 07:05:05 Produced by the JSE SENS Department.
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